The housing market faces a swirling sea of uncertainty as Cyclone Donald makes landfall, Greg Ninness says

Housing market watchers must have breathed a collective sigh of relief when the Real Estate Institute of New Zealand released its March sales figures, not because the figures were particularly good, which they weren't, but because they weren't particularly bad either.

What they showed was that the market ended up in March more or less back where it was in March last year. (You can read more about that here).

With everyone keeping an eye on the dark clouds of uncertainty gathering on the economic horizon, there was relief that the market didn't crash.

Equally, 2026 was supposed to be the year for a much-hyped economic recovery, and hopes of that, and its expected flow through to the housing market, also appear dashed.

March was a month in which everyone, buyers, sellers and those who clip the tickets on the way through, ended up  holding their breath to see what happens next.

So where could things go from here?

It's important to remember that even during times of boom or bust, the housing market broadly follows a seasonal pattern, and March is traditionally the busiest month of the year for residential real estate. This March was no different in that regard.

So even without the current economic turmoil, it would be reasonable to expect sales numbers to start declining in April. We are already seeing that in the auction rooms, with fewer properties being auctioned each week compared to March.

However, with everyone holding their breath to see what happens next, the danger is not so much of a market crash,  although that remains a possibility, but of a market that stalls. And that could lead to a chillier winter than usual as sales and prices slowly decline.

There are a couple of things to keep an eye on as the market heads into the cooler months.

Firstly, the amount of stock for sale remains extremely high.

Stock levels are usually high at this time of year. But property website Realestate.co.nz had 37,638 residential properties available for sale at the end of March, the most stock the website has had available for sale in any month in more than a decade.

So it continues to be a buyer's market.

The other figure to watch is the overhang of unsold properties each month.

The overhang is the number of properties that remain unsold after they have been on the market for at least a month. Interest.co.nz estimates there were around 25,600 such properties at the end of March. That's the highest number in more than 10 years, and was more than three times as many properties as were actually sold in March.

The most likely reason properties sit on the market unsold is their owners have unrealistic price expectations, while at the same time, potential buyers are being spoiled for choice and remain super cautious on price. This is not a good combination.

After the marketing campaigns for these properties have run their course without success, potential buyers are no longer looking at them and eventually their agents are no longer prepared to put time and effort into running open homes. So the properties become wallflowers at the real estate ball.

The owners of these properties are like a lazy cat that wants to catch a bird but can't be bothered going hunting. So it sits in the sun with its mouth open hoping a bird will just fly into it.

Unless owners are prepared to meet the market, they have about as much chance of selling their property as that cat does of catching a bird.

So where does this leave the housing market as it heads towards the winter slump?

Well, to use yet another metaphor, if the market was a plane trip you wouldn't be seeing those little oxygen masks drop down from the ceiling just yet. But it would probably pay to fasten your seatbelt because things might be about to get a bit bumpy.